Breadth was negative, with losers outpacing winners 27 to three. The biggest blue-chip decliners were General Electric (GE) , Alcoa(AA) , American Express (AXP) and Home Depot (HD) .

Shares of conglomerate GE slid 3.1% as UBS took the stock off its "key call" list, citing the risk of softer-than-predicted profit amid uncertain economic conditions.

Alcoa shares shed 3% as the company faces the possibility of a downgrade from Moody's, potentially pushing its credit ratings into junk territory, because of a steep decline in aluminum prices this year.

The only percentage gainers were United Technologies (UTX) , Caterpillar (CAT) and Intel(INTC) .

The S&P 500 fell 11 points, or 0.76%, at 1,436. The Nasdaq dipped 10 points, or 0.33%, to 3,044.

Action was mixed among sectors in the broader market with conglomerates, health care, utilities and basic materials among those in the red. The capital goods, consumer cyclical and transportation sectors rose.

Decliners edged advancers incrementally on the New York Stock Exchange , but winners slightly beat losers on the Nasdaq. Volumes totaled 3.78 billion shares on the Big Board and 1.90 billion shares on the Nasdaq.

"As for the fiscal cliff, the rejoicing over a deal yesterday and ebullience in the equity market is taking the first step toward realizing that no deal is done and positions are hardening," said Richard Gilhooly, U.S. director of interest rate strategy at TD Securities. "The threat of veto of Plan B will not sit well with the GOP and talks are likely to extend beyond next Tuesday."

The White House said Wednesday that President Barack Obama would veto Republicans' "Plan B," a proposal that was put forth as a back-up in case the budget negotiations couldn't be resolved by Jan. 1.

Plan B would raise tax rates on Americans with incomes of more than $1 million and could address the estate tax and the alternative minimum tax. However, it would not avert the spending reductions that would set in next year.

"It is my contention that the constructive technical action of the underlying market will not be toppled by a setback in the fiscal cliff negotiations," said Gene Peroni, senior vice president of equity research at Advisors Asset Management. "That being said, the 'cliff' is a serious situation that, until resolved, is likely to impede the Dow's progress beyond its recent highs around 13,600."